Recent buzz surrounding tax rates spurred a debate between the left and the right about the idea of a 70% marginal tax rate. This debate was re-ignited by Alexandra Ocasio-Cortez, a first-term member of Congress from New York. Conservative opponents responded by mischaracterizing the proposed increase in the marginal tax rate as an increase in the general tax rate. Meanwhile, progressives claimed that an increased marginal tax rate will lead to the federal government using that money on programs it cannot afford, such as increased funding for education, allocated funds to repair the damage done to Flint and other basic necessities. This argument comes from the same “Bernie-esque” narrative of raising taxes on the richest to pay for “Medicare for All” or for higher education. Unfortunately, this narrative is flawed: It is based on a premise set within the framework of balanced budgets.
The Progressive narrative goes as such: We have a limited set of money, much of which goes towards the Department of Defensive, the Pentagon, corporate tax cuts etc. Because of this imbalanced distribution, we do not have enough money for necessary programs that benefit working class Americans. By increasing taxes for the richest Americans, there would be enough to fully fund these departments. However, the whole concept of not having enough money for programs is a conservative talking point: This concern never arises when it comes to increasing the military budget, or tax cuts for the rich; no, it only applies to spending that conservatives (and liberals) do not like, such as free college and free healthcare.
The underlying assumption behind this progressive narrative is that if the federal government had more money, the Republican Party and their Democratic Party collaborators would suddenly stop their craven attempts to funnel as much money as possible into the military-industrial complex, mass incarceration, and other areas pivotal to the interests of their wealthiest donors. If anything since 2008 (and before) taught us, it is that Congress will fundamentally do the bidding of their backers: If there is more money available, lawmakers will only work to secure more funds for projects that will benefit their donors.
Unfortunately, what dictates our priorities in this country fundamentally comes down to the bourgeois character of Congress as an institution. Congress works to pass legislation that protects capitalism, which in effect means legislation that benefits the richest Americans at the expense of everyone else. We need to look deeper and ask ourselves some fundamental questions: What would the material effects be of an increase in taxes within the current political climate? Which class stands to gain the most from the increase in revenue? And most importantly, what transformative changes need to occur within the country, for current and increased revenue to be allocated properly?
If a 70% marginal tax rate was passed tomorrow, those extra billions would be used for more corporate subsidies, more funding for Israel / other right-wing projects, more funding for the US “soft power” institutions of regime change, and more funding for our military to wage war on more fronts than ever before. The ultimate reason why the United States invests so much in these causes directly relates to the reason why the US is wealthy. The US is wealthy because it exploits countries within the Global South for the benefit of global multinational companies that plunder and take the spoils for the benefit of the Empire. As a result, having a conversation about radically upending allocation of resources requires a deeper re-evaluation of the US Empire and ultimately, a dismantling of the structures that have kept this Empire afloat so far. At the end of the day, we have an allocation problem tied directly to the fundamental failings of capitalism that far overshadows the desire to just raise taxes.